Corporate Governance

Based on the latest Basel Committee guidelines on corporate governance, BCCL emphasizes the importance of corporate governance for the safe and sound functioning of banks, and believes that effective corporate governance is critical to the proper functioning of the banking sector and the economy as a whole. Banks’ safety and soundness are key to financial stability, and the manner in which they conduct their business, therefore, is central to economic health. Governance weaknesses at banks that play a significant role in the financial system can result in the transmission of problems across the banking sector and the economy as a whole.

Corporate governance determines the allocation of authority and responsibilities by which the business and affairs of a bank are carried out by its board and senior management, including how they:

Set the bank’s strategy and objectives;

Approve the bank risk appetite;

Operate the bank’s business on a day-to-day basis;

Protect the interests of depositors, meet shareholder obligations, and take into account the interests of other recognized stakeholders;

Align corporate culture, corporate activities and behavior with the expectation that the bank will operate in a safe and sound manner, with integrity and in compliance with applicable laws and regulations

Establish control functions.

Sound corporate governance is an essential element in the safe and sound functioning of a bank and may adversely affect the bank’s risk profile if not operating effectively. Well governed banks contribute to the maintenance of an efficient and cost-effective supervisory process.

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banking control commisssion of lebanon

The Banking Control Commission of Lebanon (BCCL) was established in 1967 by Law Nº. 28/67, as an administratively independent body to replace the banking control department of the central bank. The commission is composed of Five members who are appointed by the council of ministers for a five -year term.